Weekly Market Update - 21 September 2015

Market Outlook

Equity Market Outlook

• The Fed decided not to raise rates, in line with our expectations.
• We expect market to continue to be volatile going forward due to the uncertainty over the timing of the rate lift-off.
• After the recent correction, we are starting to see value emerging in a number of stocks.
• We remain positive on the stock market outlook.

Fixed Income Outlook

• The Fed and Bank Negara held their respective policy rates last week, as widely expected. Post Federal Open Market Committee (FOMC) announcement, the Malaysian Government Securities (MGS) market rallied accompanied by dollar weakness. We think Bank Negara will maintain its policy rate for the remainder of the year barring any severe slowdown in economic growth. In the local sovereign market, the MGS rallied between 6-12 bps across the curve. We saw foreign investors rolling over some of their maturing assets into 2 to 3-year papers, which is a positive sign for the local bond market.
• In other significant development, S&P downgraded Japan’s sovereign debt rating to A+ from AA- on concerns of Japan’s economic prospects.

Source: Lipper for Investment Management, as at 18 September 2015
 

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